Private Letter Ruling
202249011
Released December 9, 2022
Approved
IRS issues tax rulings for a business spin-off and Reverse Morris Trust combination
Apply this to your situation
This page covers one taxpayer's ruling from 2022, which can't be cited as precedent. Ezel answers your situation under the current Code and IRS guidance, with citations.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)
Plain-English summary
A publicly traded corporation proposed to separate one business into a controlled corporation and then combine that company with an unrelated public corporation. The distribution could occur as a pro rata spin-off or through an exchange offer and back-end distribution, and the combination was intended to qualify as a Reverse Morris Trust transaction. The plan also involved new controlled-company borrowing, cash and securities transferred to the parent, payments to creditors and shareholders, a possible debt-for-debt exchange, temporary retention of controlled-company securities, share repurchases, and transition agreements. The IRS issued 26 rulings addressing nonrecognition, stock basis and holding periods, earnings and profits, use of cash and securities, debt exchanges, retained securities, overlapping shareholders, section 401(k) plan ownership, fractional shares, and later true-up payments. The core rulings treated the separation as a section 368(a)(1)(D) reorganization and the distribution as qualifying under section 355, based solely on the submitted facts and representations. The IRS expressly did not rule on several broader requirements, including business purpose, device, and whether the transaction was part of a section 355(e) acquisition plan except as specifically addressed.
Ruling snapshot
- Question: What federal tax consequences would follow from the proposed spin-off, debt and cash transfers, and subsequent Reverse Morris Trust combination?
- Outcome: approved, 26 rulings subject to detailed representations and caveats
- Key authorities: IRC §§ 355, 357, 358, 361, 362, 368, 1001, 1032, and 1223; Treas. Reg. §§ 1.355-7 and 1.358-2
Full text (IRS public release)
Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202249011 Third Party Communication: None
Release Date: 12/9/2022 Date of Communication: Not Applicable
Index Number: 355.01-00, 368.04-00
Person To Contact:
---------------------- -------------------, ID No. -----------------
-------------------------------------- Telephone Number:
------------------ --------------------
------------------------------------- Refer Reply To:
---------------------------------------- CC:CORP:B05
PLR-122518-21
Date:
May 10, 2022
Legend
Distributing = -------------------
-----------------------
-------------------------------
Business A = --------------------------------
Business B = ----------------------------------
Business C = ----------------------------------
Controlled =---------------------------------------
---------------------------
-------------------------------
Controlled Securities = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
---------------------------------------------------
Controlled Stock = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
----------------------------------------------------
PLR-122518-21 2
Investment Advisor 1 = -----------------------------
Investment Advisor 2 = ---------------------------------
Investment Advisor 3 = ----------------------
RMT Partner = ---------------------------
-----------------------
------------------------------
Condition X = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
------------------------------------------
Qualifying Distributing Debt = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
----------------------------------------------------------------
Exchange Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
PLR-122518-21 3
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
---------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
------------------------------------------------------
Distributing Applicable Officer = ------------------------------------------
RMT Partner Applicable Officer = ---------------------------------------------------
Separation and Distribution
PLR-122518-21 4
Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
----------------------------------
Merger Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
----------------------------------
Tax Matters Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-----------------------------
Transition Services Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
--------------------------------------------------.
Transition Distribution Services
PLR-122518-21 5
Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-----------------------
Transition Contracting
Manufacturing Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
---------------------------
Real Estate License Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------
Employee Matters Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
------------------------
IP Arrangements = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
PLR-122518-21 6
-------------------------------------------------------------------
--------------------------------
Supply Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-----------------------------
Distribution Agreement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------
Intercompany Loan = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
--------------
Expense Reimbursement = -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-----------------
Date 1 =----------------------
Date 2 = ----------------------------
Year 1 = ---------
PLR-122518-21 7
Year 2 = ---------
a = ------------
b = --
c = --
d = --
e = ----
f = ----
g = ---------------
h = -----
i = -----
j = --
k = ---
l = ------------
m = ----
n = ----
Dear ------------------:
This letter responds to your representative’s letter dated October 27, 2021, on behalf of
Distributing, as supplemented by subsequent information and documentation,
requesting rulings on certain federal income tax consequences of a series of
transactions (the “Proposed Transactions”). The material information provided in that
letter and subsequent correspondence is summarized below.
This letter is issued pursuant to Rev. Proc. 2017-52, 2017-41 I.R.B. 283, as amplified
and modified by Rev. Proc. 2018-53, 2018-43 I.R.B. 667, regarding one or more
“Covered Transactions” and pursuant to section 6.03(2) of Rev. Proc. 2022-1, 2022-01
I.R.B. 1, regarding one or more significant issues under Section 355 of the Internal
Revenue Code (the “Code”). This Office expresses no opinion as to any issue not
PLR-122518-21 8
specifically addressed by the rulings below.
The rulings contained in this letter are based upon information and representations
submitted by the taxpayer and accompanied by a penalties of perjury statement
executed by an appropriate party. This office has not verified any of the materials
submitted in support of the request for rulings. Verification of the information,
representations, and other data may be required as part of the audit process.
This office has made no determination regarding the overall tax consequences of the
Internal Preparatory Transactions (as defined below), or, except as specifically
addressed by the rulings below, as to whether the Distribution (as defined below): (i)
satisfies the business purpose requirement of Treas. Reg. §1.355-2(b); (ii) is used
principally as a device for the distribution of the earnings and profits of the distributing
corporation or the controlled corporation or both (see Section 355(a)(1)(B) and Treas.
Reg. §1.355-2(d)); or (iii) is part of a plan (or a series of related transactions) pursuant
to which one or more persons will acquire directly or indirectly stock representing a 50-
percent or greater interest in the relevant distributing corporation or the controlled
corporation, or any predecessor or successor of such distributing corporation or
controlled corporation, within the meaning of Treas. Reg. §1.355-8 (see Section 355(e)
and Treas. Reg. §1.355-7).
Summary of Facts
Distributing is a publicly traded domestic corporation, the common parent of a
consolidated group for U.S. federal income tax purposes, and the parent of a worldwide
group of foreign and domestic entities (the “Distributing Worldwide Group”). The
Distributing Worldwide Group has multiple business segments, including Business A
and Business B, and Business C, which is a sub-segment of Business B.
RMT Partner is a publicly traded domestic corporation that is unrelated to Distributing.
Distributing proposes to undertake a series of transactions in order to separate its
Business C from its remaining businesses (the “Remaining Businesses”) and combine
its Business C with RMT Partner’s business pursuant to one overall plan of
reorganization (the “Plan of Reorganization”).
For purposes of satisfying the active trade or business requirements of Section 355(b)
with respect to the Distribution (as defined below), Distributing and the members of its
“separate affiliated group” as defined in Section 355(b)(3) will rely on Business A, and
Controlled and members of its separate affiliated group will rely on Business C, which
will include any activities performed for Controlled and its separate affiliated group by
Business C employees legally employed by RMT partner whose services are leased by
Controlled pursuant to an employee sharing arrangement. Financial information has
been submitted in accordance with Rev. Proc. 2017-52 indicating that each of Business
A and Business C has had gross receipts and operating expenses representing the
active conduct of a trade or business for each of the past five years.
PLR-122518-21 9
Prior to Date 1, Investment Advisor 1, Investment Advisor 2, and Investment Advisor 3,
each filed Schedules 13G reporting beneficial ownership for U.S. securities law
purposes of more than five percent of Distributing’s total outstanding shares of common
stock (the “Reporting Shareholders”). Item 6 on each such Schedule 13G stated that no
one person’s interest in the common stock of Distributing was more than five percent of
the total outstanding common shares. None of the Reporting Shareholders is
represented on the Distributing board of directors or otherwise participates in
Distributing’s management or operation. Accordingly, Distributing intends to treat each
Reporting Shareholder as a “Public Shareholder” (i.e., a shareholder that is not a
“controlling shareholder” or “10 percent shareholder,” within the meaning of Treas. Reg.
§§1.355-7(h)(3) and (14), respectively).
Prior to the External Spin-off (as defined below), the Distributing Worldwide Group will
engage in a series of internal preparatory transactions to separate Business C from the
Remaining Businesses held by certain subsidiaries of Distributing (the “Internal
Preparatory Transactions”).
Proposed Transactions
For what are represented to be valid business reasons, Distributing proposes to
undertake the following Proposed Transactions, which have been partially
consummated:
1. Distributing formed Controlled on Date 2.
2. Controlled will borrow from third party creditors in an amount currently estimated
to be up to $a (the “External Borrowing”).
3. Distributing will transfer Business C (including directly held assets and all of the
stock of a wholly owned internal controlled corporation that conducts Business C
operations directly and indirectly through its subsidiaries) to Controlled in
exchange for shares of Controlled Stock, the assumption of any related liabilities,
cash funded from all or a portion of the proceeds of the External Borrowing (such
cash, the “Controlled Cash”, and such cash transfer, the “Controlled Cash
Transfer”), and potentially Controlled Securities if it is expected that Condition X
may be met (the “Contribution”). Depending on market conditions and in light of
the significant amount of the debt of Controlled to be placed, it is likely that some
or all of the External Borrowing and/or issuance and exchange of the Controlled
Securities will occur before the Contribution and Controlled Cash Transfer. With
regard to the External Borrowing, the proceeds of the External Borrowing would
be held by Controlled pending the Contribution and Controlled Cash Transfer
until certain conditions for the Distribution have been satisfied, either in an
escrow account or otherwise with Distributing providing a conditional guarantee
of repayment of the External Borrowing (which guarantee would terminate by the
time of the Distribution). With regard to the Controlled Securities, Distributing
would provide a similar conditional guarantee of repayment. In the case of a
PLR-122518-21 10
Direct Exchange (as defined below), it is also anticipated that Distributing would
hold the proceeds of the Refinancing Debt (as defined below) in escrow or would
loan such proceeds to Controlled, which would hold them in escrow. Distributing
will be obligated under a Separation and Distribution Agreement to contribute
Business C to Controlled, and the legal documentation for the Controlled
Securities will include covenants or conditions, enforceable by the debt holders,
that Distributing will make such contributions prior to the Distribution. If the
Distribution is abandoned or otherwise delayed beyond the date on which the
Combination may be terminated for failure to occur (or some later date set forth
in the legal documentation governing the External Borrowing or Controlled
Securities), the holders of the External Borrowing and the Controlled Securities
would have their debt prepaid or redeemed by Controlled prior to maturity, along
with, potentially, a prepayment premium. In addition, if after the issuance of the
Controlled Securities, Distributing later determines that Condition X is not
expected to be satisfied, at Controlled’s option, Controlled may redeem or prepay
the Controlled Securities (i) within a period of time to be negotiated after
Distributing delivers notice that Condition X is not satisfied, in which case,
Distributing would expect Controlled to increase the External Borrowing to fund
any such special prepayment or redemption (including, potentially, a prepayment
premium) of the Controlled Securities or (ii) after b or c years (rather than d years
as would apply if Condition X is satisfied), without penalty, or with a premium that
would be less onerous than a customary make-whole premium.
4. Distributing will distribute the Controlled Stock to its shareholders via either a pro
rata distribution (the “Spin-off Distribution”), or as part of a non-pro rata exchange
offer (the “Exchange Offer”) followed by a pro rata distribution to the extent, if
any, that the Exchange Offer is under-subscribed (the pro rata distribution
following the Exchange Offer, the “Back-End Distribution” and, together with the
Exchange Offer, the “Split-off Distribution”). The Spin-off Distribution and the
Split-off Distribution are each referred to herein, in the alternative, as the
“Distribution” and, together with the Contribution, the “External Spin-off.”
5. Immediately after the Distribution, (i) a wholly-owned corporate subsidiary of
RMT Partner will merge with and into Controlled, with Controlled surviving as a
wholly-owned subsidiary of RMT Partner, in a transaction that results in
Distributing’s shareholders receiving RMT Partner common stock representing at
least 50.1 percent of the post-issuance voting power and value of RMT Partner’s
stock (the “Combination”, and the date on which the Distribution and the
Combination occur, the “Closing Date”). In connection with the Combination,
Distributing will have the right to designate e people as directors on the board of
directors of RMT Partner. The Combination is intended to qualify as a
reorganization under Section 368(a)(1)(A) and Section 368(a)(2)(E).
6. Shortly after the Controlled Cash Transfer, Distributing will utilize the proceeds of
the Controlled Cash Transfer to make payments to various creditors and/or
shareholders that it intends to treat as payments pursuant to the Plan of
PLR-122518-21 11
Reorganization under Section 361(b)(3) and as distributed pursuant to the Plan
of Reorganization under Section 361(b)(1)(A) (the “Boot Purge”). The material
payments expected to be made are described below:
a. Distributions to Shareholders. Within k months following the Distribution,
Distributing intends to use all or a portion of the Controlled Cash to pay up
to the next f regular quarterly dividends to its shareholders, which
quarterly dividends are expected to be approximately $g in the aggregate
(the “Post-Distribution Quarterly Dividends”). Following the Distribution,
Distributing also may repurchase its shares through a previously
established or newly authorized share repurchase program (the “Post-
Distribution Share Repurchases”).
b. Payments to Creditors. No later than k months after the Distribution,
Distributing may use all or a portion of the Controlled Cash not distributed
to Distributing’s shareholders to repurchase (including at a premium, if
applicable), or pay the principal and/or interest due on the Qualifying
Distributing Debt (such principal payments, “Principal Payments”, such
interest, “Interest Payments”, and such premium “Premium Payments”).
All of the Qualifying Distributing Debt was incurred in unrelated
transactions more than 60 days before the approval and announcement of
the Contribution, the Distribution, and the Combination.
7. In connection with the Contribution and Distribution, if Distributing acquires
Controlled Securities in the Contribution, Distributing intends to effect an
exchange of Controlled Securities for Distributing Debt as defined in Rev. Proc.
2018-53 (“Distributing Debt”) by means of either or a combination of the following
transactions no later than k months following the Contribution and the Distribution
(the “Debt-for-Debt Exchange”):
a. Distributing will incur h - i day short-term debt (the “Refinancing Debt”) to
one or more third-party investment banks (“Investment Banks”), acting as
principal for their own account, and use the proceeds to repay historic
Distributing debt; no sooner than j day(s) after incurring the Refinancing
Debt, Distributing and the Investment Banks may enter into an Exchange
Agreement (neither being legally obligated to do so) whereby Distributing
will exchange Controlled Securities with the Investment Banks for the
Refinancing Debt held by the Investment Banks (the “Direct Exchange”);
and the Investment Banks are expected to then sell the Controlled
Securities to unrelated investors; alternatively, the Investment Banks,
acting as principal for their own account, may acquire or hold in their
capacity as dealers commercial paper of Distributing, which would
generally be treated in the same manner as the Refinancing Debt; or
b. the Investment Banks will acquire historic debt of Distributing (“Exchange
Debt”) from existing holders of Exchange Debt; no sooner than j day(s)
PLR-122518-21 12
following the acquisition of the Exchange Debt by the Investment Banks,
Distributing and the Investment Banks may enter into an Exchange
Agreement (neither being legally obligated to do so) whereby Distributing
will exchange Controlled Securities with the Investment Banks for the
Exchange Debt held by the Investment Banks (the “Intermediated
Exchange”).
8. If Distributing is unable to effect a Debt-for-Debt Exchange due to market
conditions at the time of and following the Distribution, Distributing may retain the
Controlled Securities (the “Retained Securities”) for up to k months following the
Distribution (the “Retention”) and opportunistically sell them in taxable
transactions as soon as a disposition is warranted consistent with the Retention
Business Purpose (as defined below). On any disposition of the Controlled
Securities not pursuant to the Debt-for-Debt Exchange, Distributing will recognize
gain or loss equal to the difference between the amount realized and the basis of
such Controlled Securities.
Direct Asset Sales
In connection with the Proposed Transactions, certain non-U.S. subsidiaries of the
Distributing Worldwide Group are expected to sell Business C assets directly to certain
subsidiaries of RMT Partner in taxable transactions (the “Direct Asset Sales”).
Share Repurchases
Prior to and following the Distribution, Distributing may purchase Distributing stock from
its shareholders (the “Share Repurchases”). Distributing’s board has historically
authorized Share Repurchases, since as early as Year 1, to support Distributing's stock-
based employee compensation plans and for other corporate purposes. The Distributing
board approved the current share repurchase program in Year 2, authorizing the
repurchase of up to $l of Distributing stock with no pre-established end date.
Additional authorizations for Share Repurchases may be made in the future. Any such
Share Repurchases may be implemented through share repurchases in the open
market, pursuant to an accelerated share repurchase (“ASR”) program, through one or
more tender offers open to all shareholders of Distributing, or a combination thereof. It is
expected that, under an ASR program, Distributing would purchase a specified number
or dollar amount of its shares from a third-party investment bank at a price per share
that is determined over a specified calculation period (which often may be terminated
early at the bank’s option) and may be subject to certain caps and/or floors. Distributing
would pay for the shares upfront, and the bank would obtain shares that it delivers
upfront by borrowing shares (e.g., from customers or mutual funds). Then the bank
would buy shares, generally in the open market, over time to return the borrowed
shares and to obtain any additional shares it owes to Distributing. There may be a true-
up adjustment as between Distributing and the bank at maturity of the ASR program.
PLR-122518-21 13
Finally, under a self-tender offer, Distributing would generally stipulate both the amount
of shares and the price at which it is willing to buy.
RMT Partner Board of Directors
Following the Combination, RMT Partner’s board of directors is expected to consist of
the m then-existing directors of RMT Partner and e Distributing director designees to be
named prior to the Closing Date. RMT Partner has a classified board of directors, the
members of which are elected by class over a rolling n-year period. The e Distributing
director designees will be placed in different classes of the board whose terms are
expiring at either the first or second annual meeting of RMT Partner’s shareholders to
occur following the Closing Date. Each of the Distributing director designees will stand
for election in the normal course at such first or second annual shareholder meeting, as
applicable, following the Combination.
Overlap Counting Principles
Distributing expects that at the time of the Proposed Transactions, there will be certain
shareholders that own both Distributing stock and RMT Partner common stock (the
“Overlapping Shareholders”). For purposes of applying Section 355(e)(3)(A)(iv) (the
“Overlap Rule”) and the methodology of the example in the 1998 legislative history of
Section 355(e)(3)(A)(iv) (the “Net Decrease Methodology”), in determining the extent of
Overlapping Shareholders and their stock ownership at the time of the Combination,
Distributing will employ the principles described below (the “Overlap Counting
Principles”).
(i) Look-Through Approach. In applying the Overlap Rule and the Net Decrease
Methodology, Distributing will look through entities to the ultimate indirect owners
of Distributing stock or RMT Partner common stock and will take into account the
identified actual overlap in the ultimate ownership of Distributing stock or RMT
Partner common stock at that level, based on actual knowledge, or if Distributing
does not have actual knowledge, then based upon the sources of proof
described in paragraph (ii).
Notwithstanding the foregoing, in proving the identity of Overlapping
Shareholders, and the extent of their share ownership for purposes of applying
the Overlap Rule and the Net Decrease Methodology, Distributing will treat as
the ultimate owner of Distributing stock or RMT Partner common stock: (i) widely
held investment vehicles with public investors (such as a mutual fund or
exchange-traded fund); (ii) any regulated investment company; (iii) any domestic
pension trust described in Section 401(a) which is exempt from tax under Section
501(a); (iv) any domestic charitable organization described in Section 501(c)(3)
(including an endowment or private foundation); (v) any state, local, or foreign
government (or agency or instrumentality thereof); and (vi) any foreign trust or
pension plan (provided that the beneficiaries of the trust or pension plan have a
pro rata interest in the assets thereof).
PLR-122518-21 14
(ii) Sources and Proof of Overlapping Shareholders and Their Stock Ownership.
Absent actual knowledge as to share ownership at the time of the Distribution
and Combination, Distributing will rely on information that is “publicly available.”
Publicly available information will include: (i) information filed pursuant to
applicable federal securities laws by institutional investment managers (Forms
13F, 13D and 13G) and registered management investment companies (Form N-
Q, Form N-PORT and Form N-CSR) (together, “SEC Filings”); or (ii) information
voluntarily posted on the investor’s or the investment advisor’s website (“Website
Postings”).
In determining the identity of, and number of shares owned by, Overlapping
Shareholders with respect to ownership of Distributing stock immediately before
the Distribution and with respect to the ownership of RMT Partner common stock
immediately after the Combination, Distributing will rely on Overlapping
Shareholder information from SEC Filings or Website Postings as of the closest
point in time preceding the Distribution that discloses the relevant shareholder’s
ownership percentage of stock in the relevant corporation.
Distributing also will rely upon information that provides the taxpayer with actual
knowledge of the existence and share ownership of the Overlapping
Shareholders. For this purpose, actual knowledge means the actual knowledge
of the Distributing Applicable Officer and the actual knowledge of the RMT
Partner Applicable Officer, as certified to Distributing. In order to determine
Overlapping Shareholder information that is not publicly available on appropriate
SEC Filings or Website Postings, Distributing may obtain actual knowledge
through written or oral confirmation from a shareholder (or an authorized
representative thereof) with regard to: (i) such shareholder’s ownership of
Distributing stock, Controlled Stock, or RMT Partner common stock, (ii) whether
the beneficiaries or owners of a shareholder have direct or indirect pro rata
interests in the shareholder’s assets, or (iii) any other relevant information.
If the Distribution is effected as a Split-off Distribution, with respect to the
ownership of Controlled Stock immediately after the Distribution and immediately
before the Combination, Distributing will rely on information generated in the
Exchange Offer process to the extent available, if any.
(iii) Testing Points. If the Distribution is effected as a Spin-off Distribution, Distributing
will compare each Overlapping Shareholder’s ownership percentage in
Distributing immediately before the Spin-off Distribution with such Overlapping
Shareholder’s ownership percentage in RMT Partner immediately after the
Combination in applying the Overlap Rule and the Net Decrease Methodology.
If the Distribution is effected as a Split-off Distribution, with respect to each
Overlapping Shareholder, Distributing will compare such shareholder’s
PLR-122518-21 15
ownership percentages in Distributing or RMT Partner in applying the Overlap
Rule and the Net Decrease Methodology as follows:
(a) If the Overlapping Shareholder does not participate in the Exchange Offer
(the “Non-Exchanging Shareholder”), Distributing will compare such
shareholder’s ownership percentage in Distributing immediately before the Split-
off Distribution with such shareholder’s ownership percentage in RMT Partner
immediately after the Combination in applying the Overlap Rule and the Net
Decrease Methodology; and
(b) If the Overlapping Shareholder participates in the Exchange Offer (the
“Exchanging Shareholder”), Distributing will compare such shareholder’s
ownership percentage in Controlled immediately after the Split-off Distribution to
the extent available, with such shareholder’s ownership percentage in RMT
Partner immediately after the Combination in applying the Overlap Rule and the
Net Decrease Methodology. If information regarding an Exchanging
Shareholder’s ownership percentage in Distributing immediately after the Split-off
Distribution is not available, Distributing will compare such shareholder’s
ownership percentage in Controlled immediately before the Split-off Distribution
with such shareholder’s ownership percentage in RMT Partner immediately after
the Combination in applying the Overlap Rule and the Net Decrease
Methodology, consistent with the methodology applicable to Non-Exchanging
Shareholders described above.
Distributing Section 401(k) Plans
Distributing has more than one Section 401(k) tax-qualified defined contribution
retirement plan (individually, a “Distributing Section 401(k) Plan”; collectively, the
“Distributing Section 401(k) Plans”) for certain Distributing Worldwide Group employees.
The Distributing Section 401(k) Plans hold, in the aggregate, on behalf of the
Distributing Worldwide Group employees as beneficiaries, Distributing stock
representing less than e percent of the total value and voting power of the stock of
Distributing.
In connection with the Proposed Transactions, one or more of the Distributing Section
401(k) Plans may receive shares of Controlled Stock on behalf of some or all of the
participants therein (i.e., because the Distributing Section 401(k) Plans receive such
shares, pursuant to a Spin-off Distribution or the Split-off Distribution in respect of, or in
exchange for, shares of Distributing stock that it owns at the time thereof), and upon the
Combination such shares of Controlled Stock would convert to RMT Partner stock.
Because RMT Partner stock would not be a permitted investment under the governing
plan documents of the Distributing Section 401(k) Plans, however, it is expected that
such RMT Partner stock would have to be disposed of by the plan trustees within a
reasonable period of time (such sale, along with any sale as directed by a participant or
otherwise, a “Distributing Section 401(k) Plan Sales”). Any Distributing Section 401(k)
PLR-122518-21 16
Plan Sales would be contractually required to be effectuated in an open market
transaction.
Post-Separation Agreements
In connection with the Proposed Transactions, Distributing, RMT Partner and Controlled
have entered into and will enter into agreements (the “Post-Separation Agreements”)
intended to govern their relationship (and that of their respective subsidiaries) following
the consummation of the Combination. The specific agreements include certain
customary transaction documents, including the Separation and Distribution Agreement,
the Merger Agreement, the Tax Matters Agreement (the preceding three agreements,
the “Transaction Documents”), the Transition Services Agreement, the Transition
Distribution Services Agreement, the Transition Contract Manufacturing Agreement, the
Real Estate License Agreement, the Employee Matters Agreement, certain additional
agreements implementing the IP Arrangements, the Supply Agreement, the Distribution
Agreement, and the Intercompany Loan (all the agreements other than the Transaction
Documents, the “Continuing Arrangements”).
Distributing believes that the Continuing Arrangements may be characterized as (i) part
of the Expense Reimbursement and other indemnity payments, (ii) shorter term
transitional arrangements providing support services to Controlled generally of a nature
typical for corporate separations of the size and scope contemplated by the Proposed
Transactions, or (iii) transitional commercial arrangements. These transitional
commercial arrangements have been comprehensively negotiated between Distributing
and RMT Partner, dealing with each other at arm’s length. The parties believe that
many of the transitional commercial arrangements will be on terms similar to those used
in third-party transactions and that deviations with respect to individual commercial
arrangements are the result of the parties reaching a “package deal” with respect to the
transitional commercial arrangements as a whole and not intended to systematically
benefit one side versus the other.
Retention
The Retention, if applicable, would permit Distributing to establish the appropriate post-
Distribution capital structure for each of Distributing and Controlled and to proceed with
the Proposed Transactions even if the Controlled Securities are unable to be marketed
at a time when Distributing Debt would otherwise be able to be retired at an acceptable
price. In order to establish optimal capital structures, Distributing’s debt must be
allocated between Distributing and Controlled. This allocation would be achieved, in
part, through the External Borrowing, Controlled Cash Transfer, Boot Purge and, ideally,
the Debt-for-Debt Exchange. If, however, the Debt-for-Debt Exchange is prohibitively
costly, Distributing could achieve the same goals by selling Controlled Securities
opportunistically (together, the “Retention Business Purpose”).
PLR-122518-21 17
Sale of Fractional Shares
Pursuant to the Combination, in order to avoid the expense and inconvenience of
issuing fractional shares, all fractional shares of RMT Partner common stock that any
holders of Controlled common stock would otherwise be entitled to receive as a result of
the Combination will be aggregated by an exchange agent and sold on their behalf in
the open market (or otherwise as reasonably directed by RMT Partner), in each case at
then-prevailing market prices. The exchange agent will make available the net proceeds
thereof, subject to the deduction of the amount of any withholding taxes and brokerage
charges, commissions and conveyance and similar taxes, to the holders of Controlled
common stock that would otherwise have been entitled to receive a fractional share of
RMT Partner common stock pursuant to the Combination on a pro rata basis based on
such fractional interest, without interest, as soon as practicable thereafter.
Representations
The following representations have been made with respect to the Proposed
Transactions:
1. Except as otherwise provided below, each of the representations provided in
section 3 of the Appendix to Rev. Proc. 2017-52 are true and accurate:
a. Representations 1, 3(a), 9, 10, 12, 14, 15(a), 16, 17, 18 (assuming that
there are not large indemnification payments from Controlled to
Distributing), 21, 22(a), 23, 26, 27, 28, 30, 31(a), 36, 37, 39, 41(a), 42, 43,
44, 45, and 46 are true and accurate.
b. Representation 2 is true and accurate except with respect to the Retained
Securities.
c. Representation 4 is true and accurate other than with respect to the
Controlled Securities.
d. Representation 5 is true and accurate as applied to the Spin-off
Distribution and Back-End Distribution other than with respect to the
Controlled Securities and is inapplicable to the Exchange Offer.
e. Representation 6 is true and accurate as applied to the Spin-off
Distribution and Back-End Distribution but is inapplicable to the Exchange
Offer.
f. Representation 7 is true and accurate as applied to the Exchange Offer
but is inapplicable to the Spin-off Distribution or Back-End Distribution.
g. Representation 8(b) is true and accurate. It is possible that (i) in the
context of an Intermediated Exchange, some or all of the Exchange Debt
PLR-122518-21 18
exchanged could constitute a security and (ii) all or a portion of the
Controlled Cash could be used to repay Qualifying Distributing Debt that
constitutes a security; however, no rulings are requested with respect to
the treatment of the existing holders of the Exchange Debt or the
Qualifying Distributing Debt.
h. Representation 11(a) is true and accurate, except with respect to (i)
activities performed pursuant to the Post-Separation Agreements and (ii) a
potential employee sharing arrangement between RMT Partner and
Controlled, pursuant to which (1) RMT Partner would be the legal
employer of U.S.-based Business C employees, (2) the officers of
Controlled would continue to supervise, control, and direct the applicable
Business C employees with respect to the services performed for
Controlled and its separate affiliated group, and (3) Controlled would
reimburse RMT Partner for such services.
i. Representation 13 is true and accurate provided the rulings sought below
are obtained.
j. Representation 19 is true and accurate provided that the rulings sought
below are obtained.
k. Representation 20 is true and accurate, except with respect to the
Retained Securities.
l. Representations 24 and 25 are inapplicable.
m. Representation 29 is true and accurate provided the rulings sought below
are obtained.
n. Representation 32 is true and accurate, except for any debts arising under
the Post-Separation Agreements and the Intercompany Loan.
o. Representation 33 is modified to read as follows: Payments made in
connection with all continuing transactions arising after the Distribution will
either: (i) be made pursuant to certain Transaction Documents or
Continuing Arrangements or (ii) be for fair market value based on arm’s
length terms.
p. Representation 34 is true and accurate, except with respect to expenses
shared pursuant to the Post-Separation Agreements.
q. Representation 35 is modified to read as follows: The payment of cash in
lieu of fractional shares of RMT Partner is solely for the purpose of
avoiding the expense and inconvenience of issuing fractional shares and
PLR-122518-21 19
does not represent separately bargained-for consideration. To the best of
Distributing's knowledge, no Controlled shareholder will receive cash in an
amount equal to or greater than the value of one full share of RMT Partner
common stock (with the possible exception of shareholders who hold
Controlled Stock in multiple accounts or with multiple brokers).
r. Representation 38 is inapplicable.
s. Representation 40 is inapplicable.
2. No net losses are expected to be recognized for U.S. federal income tax
purposes as a result of the Proposed Transactions. While it is possible that a
U.S. taxable loss will be recognized with respect to some individual assets
involved in the Direct Asset Sales, none of the Direct Asset Sales will be
motivated by a desire to recognize a U.S. tax loss; such taxable losses, if any,
are expected to be immaterial; and it is expected that the Distributing Worldwide
Group will recognize a net taxable gain on the Direct Asset Sales as a whole.
3. Except as otherwise provided below, each of the representations provided in
Section 3 of Rev. Proc. 2018-53 are true and accurate. Distributing has made the
following modified representations:
a. With respect to Representation 3:
i. The holder of Distributing Debt that will be assumed or satisfied in
the Debt-for-Debt Exchange will not hold the debt for the benefit of
Distributing, Controlled, or any Related Person (as such term is
defined in Rev. Proc. 2018-53, a “Related Person”).
ii. In the event Distributing pursues an Intermediated Exchange, the
Investment Banks will not acquire Distributing Debt from
Distributing, Controlled, or any Related Person. Neither Distributing,
nor Controlled, nor any Related Person will participate in any profit
gained by any Investment Banks upon an exchange of Controlled
Securities; nor will any such profit be limited by agreement or other
arrangement. The value of the Controlled Securities received by the
Investment Banks in satisfaction of the Distributing Debt will not
exceed the amount to which the holder is entitled under the terms
of the Distributing Debt (subject to any potential premium). There
will be no co-obligation, guarantee, indemnity, surety, make-well,
keep-well, or similar arrangement, including additional security,
provided to the intermediary by Distributing, Controlled, or any
Related Person for risk of loss with respect to the Distributing Debt.
b. With respect to Representation 4:
PLR-122518-21 20
i. If Distributing effects an Intermediated Exchange, Distributing
incurred the Distributing Debt that will be satisfied in exchange for
Controlled Securities, and if Distributing effects a Direct Exchange,
Distributing incurred the Distributing Debt that will be refinanced, in
each case: (a) before the request for any relevant ruling was
submitted and (b) no later than 60 days before the earliest of the
following dates: (i) the date of the first “public announcement” (as
defined in Treas. Reg. §1.355-7(h)(10)) of the Proposed
Transactions or a similar transaction, (ii) the date of the entry by
Distributing into a binding agreement to engage in the Proposed
Transactions or a similar transaction, and (iii) the date of approval
of the Proposed Transactions or a similar transaction by the board
of directors of Distributing.
c. With respect to Representation 6:
i. There are one or more substantial business reasons for any delay
in satisfying Distributing Debt or Refinancing Debt with Controlled
Securities beyond 30 days after the date of the Distribution.
ii. With respect to the Principal Payments, Interest Payments, and
Premium Payments, if applicable, Distributing makes the following,
modified representation: Distributing will identify the amount of
Principal Payments, Interest Payments, and Premium Payments, if
applicable, (each within a reasonable range) to be made with the
proceeds of the Controlled Cash Transfer pursuant to the Plan of
Reorganization. Such Principal Payments, Interest Payments, and
Premium Payments, if applicable, will be made within k months of
the Distribution.
4. In addition, Distributing has made the following representations with respect to
the Retained Securities:
a. Distributing’s plan to retain the Retained Securities is motivated by the
Retention Business Purpose.
b. The Retained Securities will be disposed of as soon as a disposition is
warranted consistent with the Retention Business Purpose, but, in any
event, not later than k months after the Distribution.
5. The Controlled Securities will constitute securities for purposes of the application
of Section 361(a) and (c).
PLR-122518-21 21
6. The Share Repurchases were or will be motivated by a corporate business
purpose, were or will be made with respect to widely held shares, and were not
or will not be motivated by a desire to increase or decrease the ownership
percentage of any particular shareholder or group of shareholders.
7. At the time that a Share Repurchase was or will be consummated, Distributing
did not or will not know the identity of any beneficial shareholder (i) from which
Distributing stock is repurchased in the open market; (ii) in the case of an ASR
program, from which the third-party investment bank borrows Distributing stock
or purchases Distributing stock to fulfill the bank’s obligation to return borrowed
shares; or (iii) that participates in a tender offer (except to the extent that the
shareholder is the record holder of the tendered shares or provides an identifying
tax-related form or statement to Distributing in connection with such
participation).
Rulings
Based solely on the information submitted and representations made, we rule as
follows:
1. The External Spin-off will be a “reorganization” within the meaning of Section
368(a)(1)(D). Distributing and Controlled will each be “a party to a reorganization”
under Section 368(b).
2. Section 355(a)(3)(B) will not treat as “other property” any part of the Controlled
Stock actually or deemed issued by Controlled to Distributing pursuant to the
Contribution in exchange for intellectual property rights pursuant to the IP
Arrangements.
3. No gain or loss will be recognized by Distributing on the Contribution. Section
361(a); Section 361(b); Section 357(a).
4. No gain or loss will be recognized by Controlled on the Contribution. Section
1032(a).
5. The basis in each asset received by Controlled in the Contribution will equal the
basis of that asset in the hands of Distributing immediately before the transfer.
Section 362(b).
6. The holding period in each asset received by Controlled in the Contribution will
include the period during which the asset was held by Distributing. Section
1223(2).
7. No gain or loss will be recognized by Distributing upon the distribution of the
Controlled Stock in the Distribution. Section 361(c).
PLR-122518-21 22
8. No gain or loss will be recognized by holders of Distributing stock upon the
receipt of Controlled Stock in the Distribution. Section 355(a).
9. If a Split-off Distribution is undertaken, the basis of the Controlled Stock in the
hands of a holder of Distributing stock who exchanges Distributing stock for
Controlled Stock in the Exchange Offer will be the same as the basis of the
Distributing stock exchanged therefor. Section 358(a).
10. To the extent that Controlled Stock is distributed to holders of Distributing stock
on a pro rata basis pursuant to the Spin-off Distribution or the Back-End
Distribution, the aggregate basis of the Distributing stock and the Controlled
Stock in the hands of such holders immediately after the Spin-off Distribution or
the Back-End Distribution will be the same as the basis of the Distributing stock
immediately before the Spin-off Distribution or the Back-End Distribution on
which such distribution was made, allocated in proportion to the fair market
values of the Distributing stock and the Controlled Stock immediately following
the Spin-off Distribution or the Back-End Distribution in accordance with Treas.
Reg. §1.358-2(a)(2). Section 358(a); Section 358(b); Section 358(c).
11. If a holder of Distributing stock that purchased or acquired shares on different
dates or at different prices is not able to identify which particular share of
Controlled Stock is received in exchange for, or as a distribution with respect to,
a particular share of Distributing stock, the holder may designate which particular
share of Controlled Stock is received in exchange for, or as a distribution with
respect to, a particular share of Distributing stock, provided the designation is
consistent with the terms of the Distribution. Treas. Reg. §1.358-2(a)(2).
12. The holding period of each holder of Distributing stock in the Controlled Stock
received in the Distribution will include the holding period of the Distributing stock
exchanged therefor (if a Split-off Distribution is undertaken) or with respect to
which the distribution of the Controlled Stock is made (if a Spin-off Distribution is
undertaken), provided that such Distributing stock is held as a capital asset on
the date of such Distribution. Section 1223(1).
13. Earnings and profits of Distributing, if any, will be allocated between Distributing
and Controlled in accordance with Section 312(h), Treas. Reg. §1.312-10(a) and
Treas. Reg. §1.1502-33(e)(3).
14. The Principal Payments, the Interest Payments, and the Premium Payments are
payments to creditors treated as distributions in pursuance of the Plan of
Reorganization under Section 361(b)(3).
15. The Post-Distribution Quarterly Dividends and Post-Distribution Share
Repurchases are treated as distributions in pursuance of the Plan of
Reorganization under Section 361(b)(1).
PLR-122518-21 23
16. Distributing will not be required to segregate or otherwise trace the Controlled
Cash.
17. Distributing will recognize no gain or loss with respect to the Debt-for-Debt
Exchange other than any (i) deductions attributable to the fact that the Exchange
Debt may be redeemed at a premium, (ii) income attributable to the fact that the
Exchange Debt may be redeemed at a discount, and (iii) interest expense
accrued with respect to the Refinancing Debt and/or the Exchange Debt in
accordance with Section 361(c).
18. Any Retention will not adversely affect the Distribution’s qualification under
Section 368(a)(1)(D) and Section 355.
19. The initial designations of the post-Combination members of the RMT Partner
board of directors will not affect the determination of the total voting power or
value of the Controlled Stock acquired within the meaning of Section 355(e).
20. To the extent the Share Repurchases are treated as part of a plan (or series of
related transactions) with the Distribution for purposes of Section 355(e), the
Share Repurchases will be treated as being made from all Public Shareholders
of Distributing stock on a pro rata basis for purposes of testing the effect of the
Share Repurchases on the Distribution under Section 355(e).
21. Any increase, directly or indirectly, in the percentage of either voting power or
value of the stock of Distributing owned by a shareholder by virtue of the Share
Repurchases or acquisitions of the stock of Distributing, if any, as part of a plan
(or series of related transactions) with the Distribution will be taken into account
for purposes of Section 355(e) only after reducing such increase for any
reduction in such percentage interest, directly or indirectly, resulting from the
Share Repurchases and any disposition of stock of Distributing by such
shareholder or issuance of stock by Distributing, if any, as part of a plan (or
series of related transactions) with the Distribution.
22. The effect of the Share Repurchases will be taken into account under Section
355(e) and these rulings only to the extent such Share Repurchases are
otherwise treated for purposes of Section 355(e) as part of a plan (or series of
related transactions) with the Distribution.
23. Distributing may employ the Overlap Counting Principles in applying the Overlap
Rule and the Net Decrease Methodology to the Proposed Transactions for
purposes of Section 355(e).
24. For purposes of applying Section 355(e) and Treas. Reg. §1.355-7, (i) the
aggregation rule of Section 355(e)(4)(C)(i) will not apply for purposes of
PLR-122518-21 24
determining whether any Distributing Section 401(k) Plan “actively participates in
the management or operation” of any corporation for purposes of the definition of
“controlling shareholder” within the meaning of Treas. Reg. §1.355-7(h)(3) and
(ii) the determination of whether a person is a “five-percent shareholder” or “ten-
percent shareholder” within the meaning of Treas. Reg. §1.355-7(h)(8) and (14),
respectively will be made solely by reference to the Filings and Actual Knowledge
(each, as defined hereinafter). For these purposes: (A) the “Filings” are the latest
Schedules 13D or 13G filed with respect to the issuing company with the
Securities and Exchange Commission on or prior to the date of the particular sale
or disposition with respect to which it is being determined whether the seller or
acquirer is a five-percent shareholder or ten-percent shareholder; and (B) “Actual
Knowledge” is, with respect to any particular sale or disposition, limited to actual
knowledge of (i) those persons whose ownership of stock and/or options is listed
in a Form 3, 4 or 10-K filed by the issuing company with the Securities and
Exchange Commission, and (ii) with respect to the persons listed in (i), the
ownership of such stock or options listed in the latest relevant Form 3, 4 or 10-K
made on or prior to the date of such sale or disposition.
25. The receipt of cash by a Controlled shareholder in lieu of a fractional share of
RMT Partner common stock will be treated for federal income tax purposes as if
the fractional share had been distributed to the Controlled shareholder as part of
the Combination and then had been disposed of by the Controlled shareholder
for the amount of cash in a sale or exchange pursuant to which gain or loss is
recognized under Section 1001. For purposes of Section 355(e), the sale of
fractional shares of RMT Partner common stock in connection with the
Combination will not be treated as an acquisition that is part of a plan (or series
of related transactions) that includes the Distribution.
26. Any payments or transfers made between any of Distributing and Controlled and
their respective affiliates under any of the Transaction Documents or the
Continuing Arrangements regarding subsequent property transfers, or payment
of liabilities, indemnities, or other obligations that (i) have arisen or will arise
either for a taxable period ending on or before the Distribution or for a taxable
period beginning before and ending after the Distribution and (ii) will not become
fixed and ascertainable until after the Distribution will be characterized in a
manner consistent with the proper treatment if such payments or transfers had
occurred immediately before the Distribution pursuant to the External Spin-off.
See Arrowsmith v. Commissioner, 344 U.S. 6 (1952) and Rev. Rul. 83-73, 1983-
1 C.B. 84.
Caveats
Except as expressly provided herein, no opinion is expressed or implied concerning the
tax treatment of the Proposed Transactions under other provisions of the Code or
regulations or the tax treatment of any condition existing at the time of, or effects
PLR-122518-21 25
resulting from the Proposed Transactions that are not specifically covered by the above
rulings.
Procedural Statements
The ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code
provides that it may not be used or cited as precedent.
A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by
attaching a statement to their returns that provides the date on and control number
(PLR-122518-21) of the letter ruling.
Pursuant to a power of attorney on file with this office, a copy of this letter is being sent
to your authorized representatives.
Sincerely,
_Gerald B. Fleming____________
Gerald B. Fleming
Senior Technician Reviewer, Branch 2
Office of Associate Chief Counsel (Corporate)
cc:
-----------------------
--------------------------
--------------------------------------
-------------------------------
-------------------
------------------------------------------
---------------------------
----------------------------
----------------------
------------------------
Get today's answer for your situation
You just read what the IRS ruled for one taxpayer in 2022, and it can't be cited as precedent. Ezel checks the current Internal Revenue Code and IRS guidance and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the authority it relies on.